Reverse logistics is an essential constituent of supply chain management. The explosive growth of e-commerce and consumerism have increased this practice and product returns management. The term reverse logistics generally refers to the reverse of the normal supply chain. In this, the goods move from the end consumer to the manufacturer. This product return management satisfies your customers, generates new revenue systems, and decreases waste. We are very well aware of online marketing; there are also reasons for the return in damage, not the appropriate size. Similarly, goods are sent for return logistics because of seasonal stock, environmental concerns, salvage, or might be they are restocking. 

This comprehensive blog will explore the processes involved in reverse logistics and product return management and discover the current trends in reverse logistics’ functioning. 

What are reverse logistics and product return management? 

Reverse logistics, as the term, is now widely used in supply chain management. It is a kind of reverse supply chain. The conventional logistic industry transfers goods from the manufacturer to the end consumer. Meanwhile, it transfers goods from the end consumer to the seller or the manufacturer for repair, disposal, and recycling. There are the 5RSs’ of reverse logistics:

1. Returns and exchanges 
2. Reselling of returned products 
3. Repairs
4. Recycling and disposal
5. Replacements

 There are two types of reverse logistics: 

1. Green reverse logistics: Under green reverse logistics, the goods are returned to the origin source to be recycled, disposed of, or repaired in an eco-friendly manner. 
2. Return reverse logistics: Under return reverse logistics, goods are returned to the manufacturer to be restocked in the inventory without needing any subsidiary process. 

Product return management is part of reverse logistics. This operation cannot be performed without proper and efficient product return management strategies and a dedicated team. Undoubtedly, the stage is consumer-centric. This return management process aims to improve the consumer experience and ensure safe and secure goods handling. 

What are the components of reverse logistics? 

There are various components of reverse logistics, as it is a long process. The following are the components: 

1. Returns management: This process deals with managing product returns, or they try their best to avoid returns at first. This process must be quick and steady as it defines your company’s reputation. There are also return processes in case the returned product is broken, or the company has not accepted the return, and it is not refunded. 
2. Return policy and procedure: This component includes the return policies that must be adhered to by the shipping container company and the customer. They are mentioned under the product description so customers can access them easily. 
3. Unsold goods: Reverse logistics for unsold goods happens due to poor sales, inventory obsolescence, or delivery denial. 
4. End-of-Life (EOL): When a product reaches its end-of-life stage, it is no longer useful for consumers, who recycle or dispose of it in an eco-friendly manner. 
5. Management of packaging: This process includes resuing the packaging material for maintaining sustainable logistics operations. 
6. Failure of delivery: When the delivery fails, the suppliers deliver the products to the sorting phase. From there, goods are returned to their source. Rarely are there incidents when the reason for delivery failure is discovered and resent to the consumer. 
7. Rentals: You can remarket the products when the rented period for container solutions has finished. This process saves costs and optimizes operations. 
8. Repair and maintenance: Some contracts offer some guaranteed period. Free product return or replacement is available under this period. 

What are the latest trends in reverse logistics?

There are some prominent trends in reverse logistics that you must know to optimize the operations and make the process cost-efficient. Below mentioned are the major return trends: 

1. E-waste reverses supply chain: The growing quantity of electronic waste is causing challenges in maintaining logistics operations. You cannot dispose of electronic waste at random places; it needs a proper disposal location. But now, with the evolution of the logistic process, advanced tracing and tracking of the shipments is possible. This will keep the operators informed of the disposal. AI and machine learning have aligned various processes, making the task much easier. 
2. Omnichannel: Nowadays, companies are developing returns across all channels, whether online, offline, or hybrid. This will enhance the customer experience, operational efficiency, and the company’s reputation. 
3. Returns and replacement: Returns and replacement management is quite tricky. For this reason, businesses are hiring dedicated reverse logistics companies to manage their returns. With technology, AI, and machine learning, people use them to generate automated responses or simplify decision-making. It reduces the chances of human error and makes the task more efficient. 
4. Establishing refurbishment centers: Establishing refurbishment centers over the exact locations can mend the minor inconveniences caused to the product, upgrade the older products, and redistribute them among customers or return them to the sellers. 
5. Environment-friendly disposal: Sustainability is the new trend in the shipping industry. From sustainable shipping containers to eco-friendly logistic operations, they all reduce the shipping industry’s contribution to environmental degradation. The providers use environmentally friendly methods to dispose of returned products that are of no use. 
6. Cloud-based reverse logistics: Because of the COVID-19 pandemic, we have seen a drastic rise in e-commerce platforms. This increased volume of demand was challenging for logistic companies to manage, which led to inefficiencies or wrong deliveries. Reverse logistics comes into the picture. Cloud-based logistics helps businesses access real-time data and insight into the status of returned items. 
7. Blockchain: Inculcating blockchain technology in reverse logistics will benefit shippers by integrating the data and providing real-time details about the shipment. This is the dominant trend because of the reliability it offers to the stakeholders involved. It creates transparency and accessibility and decreases the chances of disputes or conflicts among the partners. 
8. Remanufacturing: Remanufacturing is one of the growing trends in the logistics field. The wastage or underutilization of returned products is a logistics problem. With the help of creative minds and technological advancements, they integrate various products from different returned goods and recreate something new for reselling. 

Benefits of reverse logistics

Reverse logistics offers various benefits to businesses, customers, and the environment. Let’s have a look at those benefits in detail: 

1. Cost efficiency: We have explored the new trends in the above section about remanufacturing. This logistics process uses the returned products to create different and unique products for selling. Also, you can reuse the packaging material while performing product returns. This leads to cost reduction in product terms. 
2. Enhanced customer satisfaction: Customer satisfaction depends on the timely return and replacement of goods. Optimized product return management creates a good company reputation. Also, customer reviews can help you learn which aspect of your service needs improvement. 
3. Continuous improvement: The reverse logistics in shipping is a great source of getting customer reviews. Companies prioritize how the consumer is feeling about their services. They evaluate the reasons for return and try to understand the aspects they must improve to optimize their services. 
4. Environment-friendly: This product return cycle allows companies to decrease the amount of waste generated. Either goods are returned to their origin source or reused or recycled, resulting in reduced wastage. 
5. Inventory control: Product return logistics gives companies sole control over their stocks. Recycling, reusing, and re-sending the goods to the origin source helps control the inventory quantity. 

What are the challenges in managing product returns?

There are some challenges that companies have to face while managing product returns processing efficiency that sometimes leads to customer dissatisfaction. Here are the challenges while managing the product returns: 

1. Time: The most disadvantageous aspect of reverse logistics is time. The transfer of goods from one location to another is a time-consuming task; reverse logistics adds to this complexity by re-transportation of goods to their origin. 
2. Ineffective operations: As far as we know, humans handle the customer service of e-commerce businesses. When humans perform the task, the chances of error increase. So, sometimes, there is a delay in logistics due to human errors, leading to customer dissatisfaction. 
3. Disruption in warehousing: Reverse logistics adds one more task to the supply chain operations. Therefore, managing the return of products rather than the warehouse control practices distracts the staff. 
4. Revenue loss: The most foreseen challenge faced by businesses is revenue loss. Returns are not beneficial for the business in any way. Also, because of the container-transportation, the fuel expense or the staff needed to manage logistics increases. 

Reverse logistics and product return management are crucial components of supply chain management. Under this process, customers return the goods for some reasons, such as damaged products received, seasonal inventory, restocking, or any other reason. Managing return logistics is challenging, but it decides your company’s reputation and customer response to your services. You need to be very careful when managing your business’s returns services. Analyze the strategies that you can opt for to optimize your reverse logistics. 

LOTUS Containers support your reverse logistics and provide different container types with comprehensive port logistics services, including warehousing, loading, and unloading. These services will make your logistic operations easier and quicker.